Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Canadian Skin Care Bucks Trends and Drives Growth in Beauty and Personal Care

In 2015, Canada bucked an important trend toward colour cosmetics seen in peer beauty and personal care markets. Skin care, not colour cosmetics is expected to post the highest retail value sales and growth over the next five years – an estimated CAD2.6 billion by 2020 – while other personal care markets such as the US, UK and Germany will see colour cosmetics grow faster than skin care until 2020.

As a category, skin care has allowed brands and retailers alike connect with Canadian consumers who are willing to spend slightly more per product. This represents an important recent shift in lifestyle, purchasing patterns and demo lifestyle, retail and demographics in Canada. These larger changes will reinforce the popularity of premium skin care products that offer natural ingredients and those that add an innovative step to skin care routines.

Premium skin care and the search for natural ingredients

Canadian consumers are turning to premium skin care products for their higher quality natural ingredients as part of larger lifestyle trends that emphasise wellbeing and the importance of natural foods. This search for ingredients has led premium skin care products to represent about 40% of the Canadian skin care market. Ingredients have also become critical in advertising for premium products, as many brands use the potential benefits and authenticity of their ingredients to attract consumers. Canadian brand Kaia Naturals devotes a page of its website to listing the ingredients in its products and explaining their benefits for the skin. Another premium Canadian skin care brand, Refresh Botanicals, tells consumers the percentage of plant derived ingredients in each product.

New locations of beauty specialist retailer Sephora and upscale department stores Nordstrom and Saks Fifth Avenue have made premium skin care products more readily available to consumers, while improving their shopping experience. Sephora’s open-shelf concept allows consumers to experiment with premium products before buying, while Nordstrom’s e-commerce site offers consumers a chance to peruse reviews of products they are considering. Both Sephora and Nordstrom also offer consumers generous return policies, making consumers more likely to purchase a premium product without the fear of being unable to return it, should it prove ineffective. Retail expansion helped to support a 5% CAGR from 2010 to 2015 in skin care and is expected to reach a 4% CAGR over the forecast period.

Multi-step skin care driving growth

Another significant contribution to the growth in skin care is the fact that Canadians are not just using better products but they are using more of them, increasing the number of steps in their skin care routine. In part, this growth is driven by purchases of natural facial oils and serums that are used under moisturisers. Facial masks have also become more popular, while anti-agers, like multi-step moisturising, are driving growth across categories in skin care.

Emphasis on skin care reflects Canada’s changing demographics

Demographics also plays a part in the growing trend toward premium products and multi-step skin care in Canada. Since the early 2000s, immigrants to Canada have come mainly from Southeast Asia. Asian-Canadians now account for roughly 15% of the population and in some cities, such as Vancouver, they represent a greater percentage. The Asian-Canadian population also features many individuals of high net worth as government statistics confirm that between 2005 and 2012 around 37,000 Chinese millionaires were allowed to become permanent residents as part of a now dismantled government program. For many Asian-Canadians, facial skin care is a high priority and they look to purchase a number of premium skin care products designed to maintain a clear, bright facial complexion. This has driven sales of premium products, such as facial masks and anti-agers. In addition, this has helped to boost the popularity of Asian brands or Asian-inspired products that launched in the Canadian market, which often featured innovative formats and ingredients. South Korean brand Amore Pacific has responded to this demand by opening locations of its Aritaum store in Vancouver and Toronto.

Skin care offers retailers and brands an opportunity to capitalise on evolving consumer tastes in Canada. Reinforced by lifestyle, retail and demographic shifts, the premium skin care market will expand over the forecast period as consumers look for products with effective, natural ingredients. Companies will also find that consumers are interested in trying the latest innovations developed abroad and are willing to add an extra product to their daily routines. While consumers in other markets become increasingly focused on cosmetics, skin care in Canada will continue to lead the way for beauty and personal care.